SUB2/WRAP DEALS = GOING TO PRISON!!? :(

[Account Closed]

Hey BP,

I'm in FL and am fascinated by sub2 deals with wrap mortgages.  I am wanting to utilize this as a way to invest and add to my portfolio.  So I was talking with an attorney and he mentioned equity skimming laws in FL for folks in default.  Here is statute: https://www.flsenate.gov/Laws/Statutes/2012/697.08

QUESTION:  Can I legally due these sub2 wrap deals on folks that have not yet gone to auction without criminal prosecution?

QUESTION: Statute mentions payment must be made for 12 months after purchase too.  So if I do make one of these deals I must ensure 12 months of payments or face the possibility of criminal prosecution?

I understand this is not a legal forum... but any FL investors hip on this Sub2/wrap deals please advise. I thought this would be an AWESOME way to handle leads that have little equity.

[Jay Hinrichs]

were this hits folks is when they try this scheme and they are under capitalized and when they default ( end buyer)  or tenant stops paying and trashs the house they cant pay the underlying because they were counting on the payments coming in.

I rescued a company a few years back in Oregon that did about 40 of these. problem was their end buyers started defaulting and because the Delta was only a few hundred a month on the good ones..  for every one that went TU it took down 3 or 4 houses cash flow.. so when 10 or more went TU they could no longer pay the under lying and the sellers were out for blood they got turned into the AG.. I stepped in and cured most of them that I could.. and I am fairly certain they would have gotten really hosed if I did not rectify the majority of them..

if you have enough liquidity and I mean real liquidity like  200 to 500k in cash to handle the ones that get called or other issues go for it.. if your thinking Hey I can put a few grand down and make the delta but I only have 5k in my savings account your setting yourself up for some heart break.